Pound Jumps as Election Exit Poll Shows Tories May Retain Power

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The pound jumped as an official exit poll showed that the Conservative Party will get the most seats in the U.K.’s general election, reducing the prospect of protracted negotiations over the formation of the next government.

Sterling strengthened at least 0.9 percent versus all of its 16 major counterparts as the survey of voters indicated Tory leader David Cameron is set to lead the largest party, just short of a majority, in a hung Parliament. Its rally versus the dollar was the largest in almost seven weeks.

In the run-up to the election, the Conservatives focused on their economic credentials, with polls showing them to be the the most-trusted party on that subject. Even so, some investors have voiced concern that the party’s pledge of a referendum on Britain’s membership of the European Union may undermine investment and hurt the pound.

Results for individual seats will be announced gradually through the night in the U.K.

The British currency rallied 1.1 percent to $1.5414 at 11:16 p.m. London time, the biggest jump since March 20. It appreciated 1.2 percent to 72.99 pence per euro, taking its gain versus the 19-nation shared currency this year to 6.4 percent.

Source : Bloomberg